How Do I Avoid Probate in Texas?

Full question:

Is there any way to avoid probate?

• Category: Wills and Estates
• Subcategory: Probate
• Date: 04/07/2025
• State: Texas

Answer:

There are a number of ways to avoid probate. One of the most common ways to avoid probate are by having property held in joint tenancy, funded in a revocable trust which passes the property to named beneficiaries, through transfer on death accounts, which automatically pass upon the death of the account holder to their named beneficiaries or by contract such as an annuity, 401k plan or insurance policy.

For example, assets held in trust, or in an account or policy with an insurer or financial institution with a named beneficiary, typically pass outside the probate process. Such assets go to the named beneficiary outside the probate process. If it is a survivorship account, or transfer on death account, it passes outside the probate process. Real estate held by spouses as joint tenants with right of survivorship passes automatically to the surviving tenant outside the probate process. That means it will not be included as part of the estate that either passes under a will or according to state intestacy laws (applicable when there is no will). If the account is held as tenants in common, it's possible that the deceased owner's share could pass to heirs.

There are various methods used to transfer assets upon death outside the probate process. A transfer of death designation is one method used to transfer assets such as stocks outside the probate process. In most states, the TOD designation can be used to transfer individual stocks or bonds, an entire security account, or mutual fund accounts, but rules vary by state.

Many people use revocable living trusts as a way to limit the amount of property subject to probate. Revocable living trusts are often advertised as a way to avoid probate all together, but often they are coupled with a "pourover" will that disposes of any property not specifically named in the trust.

A trust can be used to perform many different functions, such as reducing or avoiding tax liability, easing lifetime financial management, protecting assets, preserving family wealth, ensuring continuity of a family business, donating to charities, voiding forced heirship laws, or create a pension scheme for employees or dependents. A properly structured and administered trust may produce substantial savings in income tax, capital gains tax and inheritance tax/estate taxes. By establishing a trust, probate delays, expenses, and requirements can be avoided. A trust allows a person to provide for those who may be unable to manage their own affairs such as infant children, the aged, or persons suffering from certain illnesses. Trusts provide flexibility in distributing its assets to beneficiaries according to the terms of the trust document. Rather than distributing shares to heirs, wealth may be retained in one fund and distributed in a specified manner, protecting trust beneficiaries from spending all their inherited property.

A trust can be created during a person's lifetime and survive the person's death. A trust can also be created by a will and formed after death. Once assets are put into the trust they belong to the trust itself, not the trustee, and remain subject to the rules and instructions of the trust document. Most basically, a trust is a right in property, which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust. While there are a number of different types of trusts, the basic types are revocable and irrevocable.

A revocable living trust may be amended or revoked at any time by the person or persons who created it as long as he, she, or they are still competent. A living trust agreement gives the trustee the legal right to manage and control the assets held in the trust. It also instructs the trustee to manage the trust's assets for your benefit during your lifetime and names the beneficiaries (persons or charitable organizations) who are to receive your trust's assets when you die. Revocable trusts are extremely helpful in avoiding probate If ownership of assets is transferred to a revocable trust during the lifetime of the trustmaker so that it is owned by the trust at the time of the trustmaker's death, the assets will not be subject to probate.

In Texas, where the value of the entire assets of the estate, not including homestead and exempt property, does not exceed $50,000, a small estate may be administered by a small estate affidavit. After the affidavit has been approved by the court, the affidavit may be used to collect debts owed to the decedent.